From concept to profit

27 March 2007

I’ve had a few conversations recently with people who want to build a software product and were wondering what the true cost would be. Their general feel is that they could build a v1 app with about 6 months of dev work. This is quite plasable with the tools we have today – especially for building a web app. The natural next step, is to think that with 6 months of dev and 6 months of sales, then you have a nice little software company ready to make some killer profits.

This led me to try to think up some simple formula for estimating the cost of building a profitable company from a concept. Obviously there’s no silver bullet, but when people ask a software engineer to estimate the size of a job, they’ll take the answer and double or triple it. Why? Because the developer is likely to give their answer in terms of development effort only and its generally understood that development is just one part of the software development lifecycle and so you obviously need to account for all of the other work that needs to be done.

If your six months of development work becomes about 18 months (x 3) of work (and therefore cost) to actually build and deliver the software, then what would be a fair multiple for estimating the cost of taking that software to market?

Read the full the article.

2 Comments | Business, Finance, Software | Permalink
Posted by Andrew

Denon AVR 3806: 9.5/10

25 March 2007

This has nothing to do with business or software, but I’ve had this AV receiver for a month now and have to say how good it is.

avr3806-front.jpg

The good:

  • With 7 x 120w of power – its not just awesome sound, but awesome power and gives me the potential to upgrade to any speakers I can ever afford (currently only running some old, but great sounding KEFs)
  • The auto-room setup feature is great. My lounge isn’t perfect for speaker positioning, but you put the test mic at your desired sweet-spot and the system adjusts the power of each amp based on the distance from the speaker to the sweet-spot
  • The multi-room feature means you can dedicate two amps to another room – and play the same source as the main room – or something different

The bad:

  • The universal remote is great, but the touch screen is a little slow to use and its not even worth trying to explain how to use it to a baby-sitter!
  • You can’t play a digital audio source to room two … aparantly this feature is only available on the higher models
  • You can’t use plugs larger than 4mm on the end of your speaker cables. This is really annoying when you have a brand new amp (but no speakers yet) and you really want to hear it and you take it to a friend’s place to listen to it with their B&W speakers … only their high-end cables have the standard larger plugs on the end … and you can’t plug them in and then you really wish that Denon had just used speaker connectors that allowed standard plugs

Overall – this system is all it should be – top sound, great features and enough compatibility to see you well into the future, including lots of coax, optical, component, HDMI inputs and outputs, lots of audio and video analog to digital and digital to analog stuff and of course, 7 amps to feed 7 channel surround sound, or 5 channel surround sound and 2 channels to room 2.

Leave a Comment » | Technology | Permalink
Posted by Andrew

Software Architects Need Business Savvy

12 March 2007

The Microsoft Architect Journal published an article “Business Improvement Through Better Software Architecture” in January, which is an interesting discussion of the roles of software architects within business:

“Whenever you meet someone who is thought of as a software architect, chances are that this person is highly competent in technical IT matters—especially those that concern software—and has a high level of interest in these matters. It’s less common that such a person is equally competent in business matters.

This might be a problem! For someone to be able to create a structure that supports the business well, that someone must first understand the business, its structure, its goals, and its problems. How else would it be possible to find the “right” technical solution?

We firmly believe that this should be one of a software architect’s most important qualifications: to understand business issues well enough to be able to define IT solutions that help solve business problems, help reach business goals, and are structured in compliance with the structure of the business.”

The article discusses five architectural roles:

architects.gif

Business-Strategy Architect
This role is about business strategy rather than IT strategy. The strategic architect works closely with top management, which is the body responsible for strategic decisions. The strategic architect might even be part of top management.

Business Architect
The mission of business architects is to improve the functionality of the business. Their job isn’t to architect software but to architect the business itself and the way it is run. However, the structures they provide should be used by software architects as a foundation for the design of business software solutions.

Solution Architect
A solution architect should architect technically oriented solutions to business problems. If this means—in a service-oriented environment—to design service interfaces, it’s interesting to note that the job isn’t terribly technical. It requires technical understanding, but to an equally high degree it requires understanding of business issues and business needs. This is probably not a profile that very well matches the profile of most of today’s application architects.

Technical-Infrastructure Architect
This role isn’t directly involved in software development. The technical infrastructure exists for deployment of the solutions of the solution architect, which means that the solution architect and the technical infrastructure architect should work together to ensure safe and productive deployment and operation of the system.

Enterprise Architect
The enterprise architect role collects all of the other architect roles—with the business strategy architect role as the only exception—within it. You could argue that enterprise architecture consists of business architecture, solution architecture, and technical infrastructure architecture. You could also argue that additional architecture roles could be included; security architecture and organization architecture are two good examples.

Read the full article.

Leave a Comment » | Business, Software | Permalink
Posted by Andrew

3.2.1. Xero

6 March 2007

Sir David Tweedie (Chairman of International Accounting Standards) once said, “Accounting is a primitive subject still. There are lots of things we haven’t got right. Much decision making and many businesses sit uncomfortably in the framework of the traditional accounting model, which is a creation of the manufactoring era … balance sheets are like haggis, if you knew what went into it you wouldn’t touch it”.

So what’s the solution? Should all business owners go out and take a degree in accountancy so you can run your business on valid and relevant info? No, its simple really – we just need smarter business tools and this is where Xero comes in…

http://www.drury.net.nz/2007/03/06/xero/

“Xero is an online accounting solution for small businesses, delivered on a Software as a Service (SaaS) basis. I believe it is one of the biggest market opportunities out there and a global opportunity we can credibly go after from New Zealand.

We’ve been heads down on this for some time. We have a number of beta customers on board and will soon move into a limited release. A challenge for SaaS offerings is building out operational capability. As the software is getting to where we need need it we are now beginning to now ramp up that investment so we can deliver a customer experience in line with the quality of the software. For that reason we’re bringing in customers in small batches, learning where they need guidance, rinse and repeat.

Xero is all about people. Making a difference to the people that run small businesses and providing an opportunity for our best talent to build a world class company. The next step in my career is to build a long term company and culture that attracts and fosters talent, to earn export revenue.

Xero is design led. We recruited early some of the top interaction designers we could find Philip Fierlinger and Grant Robinson.

We’ve put an awesome technical team in place with Craig Walker, Kirk Jackson, Andrew Butel, Fletcher Brown, Adam Burmister and Jeff Wegesin.

We’ve invested heavily in product management and customer care with an exceptional group of customer advocates: Michelle Perera, Andy Leeb, Catherine Walker (Orange Girl), Catherine Robinson, Donna Wylie, Larissa Paris and Louise Roebuck.

We managed to attract Kate McLaughlin from the National Business Review to run Xero marketing and communications and the very talented Darryl Gray is in house brand guy.

Small business accounting identity Hamish Edwards brings the domain expertise to ensure what we deliver is not only technically world class but really does improve the performance of a sector that makes up 95%+ of all businesses.

It’s early days but we think we’re doing something special. “

Check it out: www.xero.com

Leave a Comment » | Business, Finance, NZ Companies, SaaS, Software, Xero | Permalink
Posted by Andrew

Business of Software

4 March 2007

Eric Sink’s ‘Business of software‘ is an excellent read for techy entrupreneurs who want to be business savvy and covers topics like sales, pricing, marketing, competition, hiring, raising investment, tradeshows and more.

Eric is a software developer who founded SourceGear, the developers of Vault (source control) and Dragnet (issue tracking), which we’ve been using at Calcium Software for sometime and are very impressed with. He was also involved in building the original ‘Internet Explorer’.

If you’re thinking of starting a software company, or you’ve built some software that you need to get to market, have a read of Eric’s articles – or buy his book called ‘Eric Sink on the business of software‘. I wish I had read this a few years ago, so its earned its place in my ‘Top reads’

Leave a Comment » | Business, Software | Permalink
Posted by Andrew